Would you like a higher SaaS conversion rate? Of course you would.
Sadly, a lot of conversion rate optimization advice out there boils down to gems of wisdom like “make your CTA button red, red converts more!” — which is… unhelpful.
(Seriously, that’s like telling a powerlifter that they can lift more by painting their barbell yellow.)
But don’t worry — we got you! Because this week, we’re going to examine how you can increase the conversion rate in your SaaS business.
And since we don’t know what kind of SaaS business you have — that mind-reading helmet we ordered hasn’t been delivered to The Draw Shop HQ yet — we will look at 4 common “sticking point” scenarios in the SaaS industry:
- Visitor-to-free-trial conversions
- Free-to-paid conversions in free trials
- Free-to-paid conversions in “freemium” models
- Visitor-to-paid conversions for B2B SaaS brands
Scenario #1. Converting visitors into free trial users
A free trial is how most SaaS businesses acquire new users. Everyone loves getting stuff for free, right? Right?..
Well, maybe once upon a time it was enough to flash a fancy landing page and drop the word “free” to attract new signups, but those good old days aren’t coming back! Your website visitors can have their pick from dozens of SaaS businesses in the same niche as your brand…
…so converting them will take a bit of extra effort.
Here are some strategies to help you increase your saas business conversion rate on free trials:
1. Start your signup process with a micro-conversion
As a general rule of thumb, your free trial registration should be as simple as possible. And if it has multiple steps, the first one should be so easy that it’s almost effortless!
Case in point: look at a well-known SaaS brand like Crazy Egg. Their free trial registration takes 4 steps — but the only thing you have to do on the landing page is to enter your website URL. As a potential user, you think to yourself, “That’s it? Piece of cake!” Then you enter the details and go to a streamlined signup form where you see more steps…
But you’re already invested, so you do the rest. And before you know it, you’re enrolled in a 30-day trial!
(We completed the first step when we were doing research for this article, and had to stop ourselves from completing the registration. That’s how good it is.)
2. Show your service in action
Unlike, say, selling ice cream, a SaaS offer is often hard to put into words. It doesn’t mean you shouldn’t try (more on that later) — but it’s better to channel your inner screenwriter and “show, don’t tell.”
Or rather, to show while also telling.
Create a demo video or an explainer talking about your SaaS offer, and put it on your free trial landing page. It can also double as an advertisement for driving traffic to your website, so it’s a useful marketing asset in more ways than one!
3. Clarify your value proposition
The value of your SaaS offer should be blindingly obvious just from taking a single look at your free trial landing page. That means the copy and visuals on it must pass the caveman test.
Didn’t we just say that said value can be hard to put into words? We did, and it is. But guess what? It doesn’t change anything! You still need a crystal-clear value proposition, or your SaaS conversion rate will always stay underwhelming.
Edit the page yourself, hire a copywriter, ask your best friend to tear it apart — do whatever it takes. Make every word, every picture and every video on your free trial page make sense to visitors, even if (especially if!) they have zero technical knowledge about your product.
4. Tweak your free trial terms – or ditch it altogether
There are literally dozens of ways to offer a free trial for your SaaS product… but they aren’t all created equal.
Some might not fit your target market and others might not align with your business model. You should never create a free trial offer based on “best practices” — instead, test different approaches and find out which one works best for you.
- Do you offer a 7-day trial, a 14-day trial, a 30-day trial, or maybe a 60-day trial?
- Do you ask for payment details upfront or later?
- Do you offer a free trial for your entry-level plan, or let users test your highest-tier service?
And so on. In fact, you might discover that the free trial model doesn’t work for you at all and decide to ditch it! Which is more common than you think in the SaaS industry.
Scenario #2. Converting free trial users into paying users
SaaS marketer Lincoln Murphy writes that a great goal for a free-to-paid SaaS conversion rate would be 25% for opt-in free trials (the kind where you don’t need payment info to sign up) and 60% for opt-out free trials (the kind where you provide payment info at signup, and have to actively cancel).
If your SaaS free trial converts at or above these numbers, you’re golden! Focus on other parts of your business with a clear conscience. But if it doesn’t…
Let’s see what you can do about it.
1. Analyze user behavior for “common conversion actions”
People who become paying users later interact with your free trial in a different way from those who won’t ever buy.
They spend more time with it, they actually use your solution and customize it for their needs, and so on. You’ll have to analyze your user activity to figure out what those actions are for your product.
These CCAs (common conversion actions) can help you separate serious potential users from freeloaders, and focus your conversion efforts on them. You can also use these insights to improve the onboarding experience for all users, serious or not, which will help them see the value of your product more clearly — and potentially boost your SaaS conversion rate!
2. Create a great onboarding experience
If you can help free trial users get the most out of your software as soon as possible, they’ll have a powerful reason to keep using it and start paying! That’s why you need a great onboarding process.
- Highlighting the features most relevant to the user based on your data and your customer personas.
- Creating onboarding video tutorials that help new signups use the software effectively.
- Giving your users plenty of immediate support — through live chat, a knowledge base, or (ideally) both.
Remember: your goal isn’t just to make people good at using your software, but showing them how they can apply your solution to create value in their lives. It shouldn’t be about “here’s how you access the analytics dashboard” but “this is how you can solve your problem with our product”.
3. Attract high-quality users with inbound marketing
Finally, perhaps the best thing you can do to boost your SaaS conversion rate is this:
Come back to the top of your marketing funnel and ask yourself, “Am I attracting my ideal users?”
The thing is, you can use every strategy, trick, and hack in the book to increase your free-to-paid conversions — but if there aren’t many high-quality users in your funnel, you won’t get the results you need.
Without a solid inbound marketing strategy built to attract serious evaluators to your SaaS business, about 70% of your free trial signups will be duds, and only 30% will be high-potential prospects.
That ratio looks depressing, but it’s not set in stone! You can focus on marketing to the right type of users by doing this:
- First off, determine who your ideal users are and create customer personas for each sub-group. You’ll know where they hang out, what they want, and how to talk to them.
- Build a strong SEO foundation — your high-potential prospects are already looking for a solution like yours, and this is a great way to attract them.
- Invest in top-quality content and use it to drive traffic to your free trial page. It could be articles, white papers, marketing videos, podcasts, infographics — any format works, as long as your target market actually prefers it.
These are the basic 3 elements you should focus on. Then, you can expand on that base with paid traffic, retargeting, partnership and influencer marketing, and more.
Scenario #3. Getting “freemium” users to upgrade
Compared to the “free trial” approach to SaaS, the “freemium” model has 2 key differences:
- The free-to-paid SaaS conversion rates are lower (in the single digits), but the overall number of users (free and paid) is larger.
- The sales cycle is much, much longer — think months, or sometimes years.
With a freemium model, you basically operate a wholly separate software product that’s free forever. And then your users get an opportunity to upgrade to a better, paid version if they want to. That’s why you get more users overall, but fewer of them convert.
Your want to approach freemium conversions from four main directions:
1. Always highlight and explain the value of your paid offer
Why are freemium SaaS conversion rates so low? Because most users never feel the need to upgrade — the limited free version satisfies them completely.
Some of them, however, would consider upgrading… but they don’t see the value. So make them see!
You can do that by highlighting that they’re using a free, limited version somewhere in the copy or in the UI of your software (or both). You can also email them about new features, or place low-key upgrade calls to action when they click on a feature that’s inaccessible to free users — or want to do something outside the scope of their basic account.
2. Use discounts and value-adds strategically
There’s limited value in discounting your product to people who may not even want to buy it. It devalues your brand and, if overused, it can kill any shreds of urgency they might have felt.
You can only see so many “special offers” from the same brand over and over before they stop being special!
That said, there’s a couple of things you can do that don’t cut into your bottom line and give your users a good incentive to pay, like:
- Give a discount on an annual plan to new users only — but it has to be an actual one-time offer, not something you send to them every quarter.
- Throw in a valuable service like concierge onboarding, or a consultation that would normally cost money.
3. Let them “test-drive” your premium features
This is basically a free trial within an already free-forever account. You give your users a taste of the full-featured version of your SaaS product for a limited time. You can do it at the very beginning of their lifecycle, or after they have been an active user for some time.
Personally, we like the second option better, because:
- a) An active free user may well be a serious prospect who’s on the fence about upgrading (like we talked about just earlier) — and a test-drive of your paid features could tip the scales.
- b) You can segment your users by behavior and only award the “test-drive” to those most likely to convert based on their CCAs (common conversion actions).
4. Educate them so they “grow out” of your free tier
Finally, one of the best ways to make sure more of your free users will want to upgrade is… to help them grow out of your free offer.
For example, if you sell email marketing services and your free option lets users have 500 subscribers, it’s in your best interest to teach them how to grow their email list far beyond that number — and to monetize it so they can afford your paid options!
You can educate your users in a variety of ways, from training your customer support staff to help your users succeed to creating tutorials (text-based, video, or both) — or even a complete online course — on using your product to achieve certain goals. It’s up to you!
Scenario #4. Converting visitors into paying users
Finally, with some SaaS business models, it makes sense to skip the free trials and freemium offers and go straight to setting up a paid account. This is especially relevant if you run a B2B software business, and your clients are on the bigger side — mid-level, or enterprise-level companies.
But even if you sell to cash-rich businesses, going from a website visit to a buying decision is still a big ask. Here’s how you can bridge that gap and increase your SaaS business conversion rate:
1. Offer a “sandbox” demo or multiple demo options
Selling high-end software is kind of like selling cars — you want to offer a test-drive first, then ask for the sale.
Most B2B SaaS businesses give “sandbox” demos where the prospect can log in a mock account and play around with all the features before making a decision. However, you can go one step beyond and give your prospects a choice between different demos:
- A self-paced demo where they can log in and poke around by themselves.
- A live or pre-recorded webinar demo where one prospect or a group can see the software in action presented by someone else and maybe play around in their own version simultaneously.
- A 1-on-1 demo where someone on your team guides them through the software, hands-on, answering questions and giving advice along the way.
2. Remove the risk as much as you can
If your prospect needs to make a buying decision before they can use the software, it’s only natural that they feel apprehensive about that. After all, they are risking their money, time, and future opportunities by trusting you!
You can assume part of that risk by offering:
- A money-back guarantee that covers a 30-day period, or a 60-day period. You can also go one step further and use a creative guarantee of some sort. For example, “if our CRM solution doesn’t produce at least 10 paying customers for you in 60 days, we’ll refund your purchase!”
- Make cancelation as easy as possible. Your prospects often worry about being locked into a multi-year contract, and knowing that they can cancel at any time helps to overcome their objections.
Boost your SaaS conversion rate with video marketing
You might have noticed that we mentioned video marketing quite a few times in this article. That’s because video is a powerful tool for increasing your SaaS business conversion rate!
You can use it to:
- Create high-converting demo videos and explainer videos.
- Make onboarding and tutorial videos.
- Create advertisements targeted at your ideal users.
- Announce new features and special offers.
To help you get started with video marketing for your SaaS business, we want to offer you a free audit of your video marketing strategy. One of our experts will sit down with you, examine your business goals, and tell you exactly how you can achieve them with an effective marketing video!